IASB Resolves to Re-Expose its Insurance Proposals
The International Accounting Standard Board has clarified that it will be re-exposing its proposals pertaining to accounting for insurance related contracts and will do the same with a set of well planned questions. Even though the thoughts pertaining to the project are yet to be completed, the International Accounting Standards Board is of the opinion that re-exposure of the proposals will result in minimizing uncertainty from the market. When it came to the decisions related to re-exposure, the IASB took quite a few factors into consideration, in addition to the amount of time, which has been spent on the project as well as the need of releasing an accounting standard as soon as possible. The questions that IASB will be asking include: the treatment that will be given to contracts that are participating, the presentation of the premiums in comprehensive income statement, the treatment of the profit that is unearned in the insurance related contract, presenting the effect related to the changes in the rate of discount, which is utilized for measuring the insurance contract related liability and the traction related approach. The date for the re-exposing hasn’t been declared yet.
The IASB held its meeting on 26th September 2012, in order to discuss the proposals related to insurance contracts related accounting. The chairman of the International Accounting Standards Board, Hans Hoogervorst stated that the board was fully aware of the problems being encountered by the insurance organizations as well as pension related funds in the existing environment of low interest. He further mentioned that the board realizes that relevance of creating a standard that is workable on the basis of the existing measurement as quickly as possible. But it is equally important for the board to establish the appropriate standard.
Hoogervorst further mentioned that in view of the changes incorporated after the release of the original Exposure related draft as well as the advantage that the board feels can be acquired from acquiring the input from the constituents on these very targeted matters that the targeted re-exposing questions is the appropriate decision. By limiting the questions in this manner will allow IASB to skip re-opening of the matters that have been already decided and well re-considered.